EV upstart Rivian may use a subscription service to give customers more flexibility in their vehicle ownership experience and open up a direct-sales path to customers without running afoul of dealer franchise laws.
Rivian planned to utilize a direct-sales approach from the very beginning, but as Tesla has demonstrated, that path is fraught with complication and conflict. A subscription model would allow the company to sell a plan directly to customers in states where direct-sales are either explicitly illegal or logistically impractical.
Automotive News reports that CEO RJ Scaringe told a gathering of industry insiders at the headquarters of its new investor and partner, Cox Automotive, that the initial targets for a subscription service would be customers who have needs that would be best met by different vehicles.
"You may use one solution to get to and from the office during the week. But on the weekend, you may want a subscription program," he said, alluding to a model that has been used with mixed success by other manufacturers.
Cadillac revived its Book program earlier this year after a failed first attempt; BMW and Mercedes-Benz also offer subscription programs. Outside of the premium space, it remains somewhat uncharted territory. Fortunately, Rivian plans to play in that up-market range.
Scaringe didn't go into detail regarding how such a service would be implemented, but the fact that this meeting took place at Cox Automotive may signal that Rivian plans to leverage its investor's sales platforms and logistics framework to make a subscription concept a reality.
Cox owns Autotrader, Kelley Blue Book, and Manheim, among other brands. Amazon has also invested in the company, and while its known that Rivian plans to produce electric delivery vans for the e-tail giant, there also exists in that tie-up the opportunity to explore a direct-sales partnership.
Ford, another significant investor, remains committed to the traditional dealer franchise model, and will likely steer clear of any end-run strategy Rivian has in mind.